Macronix International Co (旺宏電子) yesterday said that stronger-than-expected demand for memory chips from its top client, Nintendo Co, and other new products would fuel growth momentum in the second half of this year, shrugging off the effects of the US-China trade row.
US trade sanctions on Huawei Technologies Co (華為) would barely dent the chipmaker’s shipments to the Chinese company, Macronix said.
The US ban has taken a toll on Huawei, causing its smartphone sales to drop 40 percent over the past month and could cut its revenue by US$30 billion in the next two years, Huawei founder Ren Zhengfei (任正非) told a panel discussion in Shenzhen, China, on Monday.
“Fortunately, we produce very few memory chips for mobile phones,” Macronix chairman Miin Wu (吳敏求) told reporters on the sidelines of the company’s annual general meeting, implying limited impact from the Huawei ban.
While Huawei is one of the Hsinchu-based chipmaker’s top three clients, it accounts for less than 10 percent of its revenue, Wu said.
Macronix primarily supplies NOR flash memory chips used in Huawei’s 5G base stations, he said.
As global trade becomes chaotic due to the trade spat, Macronix is more cautious about the outlook for the second half, Wu said.
“It is certain that the second half would be better than the first half. However, we are not so sure how robust the strength would be,” Wu said, referring to the trade dispute, which has shaken global business confidence and reduced Macronix’s order visibility.
Two months ago, Wu anticipated that the dispute would be over by the end of this month.
However, now, the chances of the world’s two biggest economies resolving the dispute looks slim, he said.
“As uncertainty is high, clients tend to place short-term orders, rather than long-term ones. That makes it difficult for us to make forecasts,” Wu said.
However, orders from long-term client Nintendo “has exceeded our expectations in the past two months,” he said. “Demand is better than we thought.”
Nintendo’s strong demand for ROM memory chips helped boost Macronix’s revenue to NT$2.72 billion (US$86.27 million) last month, up 30 percent from April.
“That is very unusual, as the first and second quarters are usually slow seasons,” Wu said.
To further fuel growth, Macronix plans to mass produce advanced 19-nanometer NAND flash memory chips in the fourth quarter, he said.
The chipmaker has budgeted NT$14.2 billion for new facilities and equipment this year, mostly for 19-nanometer technology.
Shareholders approved a plan to distribute a cash dividend of NT$1.2 per share, representing a 40.49 percent payout ratio based on earnings per share of NT$4.94 last year. That implies a dividend yield of 5.57 percent, based on the stock’s closing price of NT$21.55 yesterday.
CLIENTS’ RIGHTS: Banking Bureau Deputy Director-General Lin Chih-chi said the buyer and Citibank Taiwan would need to disclose changes to branch operations DBS Bank Taiwan (星展台灣), the local unit of Singapore-based DBS Group Holdings Ltd, has reportedly won a bid to acquire Citibank Taiwan Ltd’s (花旗台灣) consumer banking business, but the two companies declined to confirm the report yesterday. Citibank Taiwan’s consumer banking business is to be sold for about NT$60 billion (US$2.17 billion) to DBS Taiwan, the Chinese-language Economic Daily News reported on Sunday. DBS Taiwan and its parent company are expediting the negotiations with the seller’s US-based parent company, while other local bidders, including Fubon Financial Holding Co (富邦金控) and Cathay Financial Holding Co (國泰金控), have dropped their bids, the report said. Citibank
Intel Corp yesterday said it has placed its first order with ASML Holding NV to purchase the semiconductor industry’s first TWINSCAN EXE: 5200 system, as the US chip giant aims to compete with Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) in advancing to 2-nanometer process technology. The Dutch semiconductor equipment maker’s TWINSCAN EXE:5200 system is an extreme ultraviolet (EUV) high-volume production system with a high numerical aperture (NA) that can produce 220 wafers per hour, more than the 150 wafers that its previous generation TWINSCAN EXE:5000 system can handle. ASML aims to launch the new system in 2024. ASML president and chief
MediaTek Inc (聯發科), the world’s biggest 5G chip supplier, saw its ranking rise by one notch to No. 7 last year among world semiconductor vendors, as it benefited from the rapid 5G smartphone uptake in China after Huawei Technologies Co (華為) was forced to exit the market, Gartner Inc said in a report yesterday. MediaTek’s revenue soared 58.8 percent to US$17.45 billion last year from US$10.99 billion in 2020, outpacing the global semiconductor industry’s growth of 25 percent, according to Gartner’s tally. That gave MediaTek a 3 percent market share. The Hsinchu-based chip company ranked No. 8 in 2020, behind Texas Instruments
South Korea’s antitrust watchdog yesterday fined 23 domestic and foreign shippers a combined 96.2 billion won (US$80.84 million) for price-fixing, including three Taiwanese container shippers — Evergreen Marine Corp (長榮海運), Yang Ming Marine Transport Corp (陽明海運) and Wan Hai Lines Ltd (萬海航運) — the Central News Agency and Japan’s Nikkei Asia reported. Korea Marine Transport Co and Sinokor Merchant Marine Co instigated the collusion by raising freight rates for routes between South Korea and Southeast Asia, China and Japan, and they were later joined by other foreign and domestic firms, the Korea Fair Trade Commission said, citing the results of an